Gene Therapies Present Reimbursement Challenges That Have Yet to Be Answered

Laura Joszt, MA
Laura Joszt, MA

Laura is the editorial director of The American Journal of Managed Care® (AJMC®) and all its brands, including The American Journal of Accountable Care®, Evidence-Based Oncology™, and The Center for Biosimilars®. She has been working on AJMC® since 2014 and has been with AJMC®'s parent company, MJH Life Sciences, since 2011. She has an MA in business and economic reporting from New York University.

With more than 3000 gene therapies in development, payers will have to grapple with the challenges of paying for these innovative but expensive therapies.

With more than 3000 gene therapies in development, payers will have to grapple with the challenges of paying for these innovative but expensive therapies. During a panel at Virtual ISPOR 2021, speakers highlighted the current coverage and reimbursement landscape, how to assess the value of these therapies, and opportunities for the future.

Omar Dabbous, MD, MPH, vice president, global health economics and outcomes research and real-world evidence, Novartis Gene Therapies, kicked the session off with an overview of the gene therapy landscape. Of the more than 3000 therapies in development, about 25 products are in phase 3 development and the number of trials has increased significantly over the last 30 years, he explained.

The highest number of therapies being developed are in the oncology space, and in the nononcology space, neurological disease has the most. The big question around these therapies is how durable the response is. Dabbous reported that data have shown that in Parkinson disease the effect lasts at least 10 years, in spinal muscular atrophy (SMA) the effect lasts at least 5.6 years, and in Duchenne muscular dystrophy the effect lasts at least 2 years.

“What does that say to us? It says that gene therapy works, and the limited time of follow-up on these patients indicates that the benefits remain in place,” he said.

Because gene therapies are a single, one-time dose with long durability, there are a lot of questions related to the high upfront cost of these therapies. For instance, how should we look at value? Is value just the clinical benefits? Does the value encompass the societal value of the therapy and the quality-of-life improvements for patients and caregivers?

Research from Peter J. Neumann, ScD, director, Center for the Evaluation of Value and Risk in Health, Institute for Clinical Research and Health Policy Studies, Tufts Medical Center, and his colleagues highlighted the incremental quality-adjusted life-year (QALY) gains for gene and cell therapies compared with other therapies and biologics. They reviewed QALY gains over the last 2 decades for drugs and biologics and over the last couple of years for gene therapies, and they found that the gains among gene therapies were large.

Voretigene neparvovec-rzyl (Luxturna), which treats inherited retinal dystrophy, had a 1.3-QALY gain and oasemnogene abeparvovec (Zolgensma), which treats SMA, had a QALY gain of 11.8.

“Now, those of you are looking used to looking at incremental QALY gains, these are quite large,” he said. “Usually, we're looking at QALY gains that are much smaller than this.”

When looking at drug categories as a whole, the difference in QALY gains for cell and gene therapies was pronounced. On average, QALY gains for cell and gene therapies were 5.78, compared with just 0.49 for drugs and 0.43 for biologics.

“There's something different about the cell and gene therapies,” Neumann said.

He has also been involved with the Specialty Drug Evidence & Coverage Database, which is a database of how US payers cover specialty drugs. The database includes more than:

  • 300 specialty drugs and products
  • 8000 coverage decisions by US payers
  • 35,000 historic decisions
  • 40,000 citations
  • 164 million lives covered
  • 90 product manufacturers

According to Neumann, the database has shown just how much variation there is in coverage of specialty drugs by US payers. Looking only at cell and gene therapies, the database shows that 57% of coverage decisions were more restrictive than the FDA label. Looking specifically at Zolgensma, some payers are only covering it based on patient subgroup, some put provider restrictions in place, and some put on multiple restrictions. For instance, looking at 4 big payers, Anthem, Blue Cross and Blue Shield of North Carolina, and Centene cover the therapy only for SMA type 1 and UnitedHealth covers SMA type 1 or type 2.

With Zolgensma, payers also had policies around patients’ number of copies of the SMN2 gene, they varied with respect to the patients’ age of eligibility, and all the plans required that patients do not rely on ventilators.

“These plans are looking at the same evidence base but they're coming to different decisions about the gene therapy,” Neumann said. “And we see that no matter what gene therapy we're looking at.”

The rising cost of treatments has led to calls for cost containment that will only intensify with the advent of targeted and powerful treatments like cell and gene therapies, he said. The challenge is finding what the right price is.

“Value-based pricing may not always achieve the lowest price,” Neumann said. “But aligning price and value means that society expends its resources efficiently to improve population health. It sends appropriate signals to the innovators, and that is obviously important.”

When creating innovative pricing agreements, it all comes back to the uncertainty of cell and gene therapies. There are always uncertainties when any product launches, but those for gene therapies are unique because they are about the long-term efficacy and durability based on limited evidence for a small size of the population, explained Lou Garrison, PhD, professor emeritus, The Comparative Health Outcomes, Policy, and Economics Institute, School of Pharmacy, University of Washington.

“So, this gene therapy, that's a result of the scientific progress, progress is posing real challenges for the fragmented US health insurance and delivery system, which really wasn't designed for high-value cure that could be provided in a single administration,” he said.

At launch, with these new gene therapies, it’s unknown if the therapy will provide 5 years, 10 years, or a lifetime of benefit. In a health where budgeting is done on an annual basis with a complex of insurers that hand off patients over time, these therapies create real problems, he said. A single-payer system outside of the United States may have the ability to spread out the cost over time like an annuity payment, but that isn’t as easy to do in the United States.

In the last decade, performance-based risk-sharing agreements have been worked on and there has been a relatively high uptake in the gene therapy area, according to Garrison. There are 5 characteristics to these agreements that help to address the uncertainties that gene therapies present:

  1. Data collection program agreed on between the manufacturer/provider and payer
  2. Initiation of data collection typically following regulatory approval and linked to postlaunch coverage decisions
  3. Price, reimbursement, and/or product revenue linked to outcomes from data collection with an explicit preagreement implicit option to renegotiate coverage, price, and revenue at a later date
  4. Addressing uncertainty through data collection comparing efficacy or effectiveness to current standard of care
  5. Different risk distribution between the payer and manufacturer compared with historical relationships

From 2009 to 2012, there was a rapid growth in the interest for innovative pricing schemes, but that has slowed down, according to Garrison. One of the challenges has been that the data systems aren’t great at providing real-time data to monitor what is going on, “and you really need to be able to do that,” he said.

There are 16 types of agreements that people are looking at from likely—annuity/installments and pay for performance—to ones that are less likely—reinsurance—and those that haven’t even been tried yet—healthcoin.

The annuity and pay-for-performance agreements are appealing now because they provide the opportunity to spread payments out over a longer period of time and to measure outcomes so payers don’t feel they are paying for nonresponse. These contracts in the United States tend to be only 2 to 3 years, which doesn’t work well for gene therapies that will be durable over the course of an entire life.

“But practically speaking, it's really hard to follow people in a US health care system for longer than three years,” Garrison said. “So, that is a big challenge.”